Samson Oil and Gas Announces Sale of Foreman Butte Project

The deal will earn Samson US$40 million, and is effective January 1, 2018. However, the company is still considering bids and offers from interested parties.

Samson Oil and Gas USA, a wholly-owned subsidiary of Samson Oil and Gas Limited (ASX:SSN,OTCQB:SSNYY), has announced it has entered into a purchase and sale agreement with Eagle Energy Partners, for the sale of all of Samson’s Foreman Butte project, located in the Williston Basin in North Dakota and Montana. The deal will earn Samson US$40 million, and is effective January 1, 2018.

As quoted from the press release:

Pursuant to the PSA, as amended, the transaction was scheduled to close on October 15th but failed to do so. As a result, the PSA has now expired. Samson remains in discussions with the buyer but is now actively seeking an alternate buyer for the asset. The recent appreciation in the price of oil has enhanced the reserve value of the asset. The company is therefore confident that interest in the asset will remain high. All reserves shown for September 30th, 2018 and June 30th, 2017 are designated as 1P reserves.

The PDP and PDNP reserve estimates and forecasts of future production rates are based on historical performance and analogy data. If no production decline trend has been established, future production rates and decline curves are based on analogous wells. If a decline curve is established, this trend is used as the basis for estimating future production rates.

The reserve estimates utilize historical operating costs of the wells and leases, subject to the report, and are held constant for the life of a well. Development costs are based on authorizations for expenditure for the proposed work or actual costs for similar projects. Abandonment costs are assumed to be offset by the salvage value as all of these projects are located onshore. T

he reference point used in the reserve estimates is the sales point, and the reserves and their value are wholly attributable to the Consolidated Entity’s economic interest, net of royalties, operating and development costs, and production and ad valorem taxes.

PUD estimates are based on a drill and complete estimated expenditure of US$375,000 per well. As these wells are infill drilling, all offtake and production infrastructure is readily available.

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